From Drought to Drenched: A New Weather Market

Planting delays are grabbing the markets attention as April may be a no-go for corn planting. Jerry Gulke analyzes the 2013 weather market.

Only a few farmers would label the 2013 planting season as anywhere near perfect.

As of April 14, only 2 percentage points of the U.S. corn crop is in the ground. The five-year average for this week is 7 percentage points. Last year, 16 percentage points of the corn crop had been planted. Texas and North Carolina are the only states that are on pace with their average planting schedule.

While planting is far from being called late, many are nervous the recent wet weather that traveled across the majority of the central U.S. will continue.

"Most people think now they won’t get into the field until May 1, whereas last year they were in the field by April 5," says Jerry Gulke, president of the Gulke Group. He says traders are already betting that corn acres will go to soybeans due to planting delays.

Gulke says new-crop soybeans took new lows this week because traders are buying corn and selling beans.

The good news for the week is all the extra rain did provide strength to the corn market. May 2013 corn closed at $6.52 on Friday and December 2013 corn at $5.47.

"We needed to see corn go higher," Gulke says. "We’re looking at corn demand for this year’s crop that is not much better than last year."

He says USDA is predicting if a decent corn crop comes in this year, we can probably snap back demand by 1 billion bushels over time. "But I think the market also realizes you don’t need to plant all those acres," he says. "If you can get an average yield on what you do plant, you may still have too much. I think the market is starting to look at that."

It’s Still Very Early

Even though many farmers wish they were planting now, Gulke says there hasn’t been enough wet weather yet to really prohibit farmers from planting all their intended corn.

"The market knows you can plant 20% of the Iowa corn crop in five days," he says. "Spring is going to come. It just makes for a tough situation right now."

Until there is a break in the weather, Gulke doesn’t believe there will be a lot of corn sold. "The farmer’s not going to sell right now when he can’t get his tractor into the field. And, the speculator is real concerned because he got slammed so hard by gold."

The big question is, will we get more rain or sunshine?

Gulke doesn’t expect farmers to give up on their corn acres, for at least another month. "Most farmers like to plant corn," he says. "I have a feeling we’ll go after corn acres for as long as we can. In 2011, we planted up until the first week of June."